Two distinct Flk-1+ mesoderm, hemangiogenic and cardiogenic, establish the functional circulatory system. We recently made progress in further identifying Flk-1+ hemangiogenic and cardiogenic mesoderm by the PDGFR1 expression. Specifically, while Flk-1+PDGFR1- hemangiogenic mesoderm can generate hematopoietic and endothelial cells, Flk-1+PDGFR1+ cardiogenic mesoderm can generate endothelial, smooth muscle cells and cardiomyocytes. However, our understanding of how the Flk-1+ mesoderm is specified is currently limiting. Intriguingly, there seems to be an antagonistic relationship between hematopoietic/vascular and cardiac outcome. Our preliminary studies suggest that we can skew the Flk-1+ mesoderm outcome by temporally modulating expression of the hemangiogenic transcription factors. Specifically, when ER71, GATA2 and Scl were temporally co-expressed during the mesoderm formation and patterning stage, only the Flk-1+PDGFR1- hemangiogenic mesoderm was formed. At the same time, no Flk-1+PDGFR1+ cardiogenic mesoderm was formed. Further characterization of the ER71, GATA2, and Scl mediated combinatorial molecular function would provide insights into the mechanisms by which hemangioblast lineage commitment occurs. In aim 1, we will test the hypothesis that hemangiogenic mesoderm specification occurs at the expense of cardiogenic mesoderm in pluripotent stem cells and developing embryos. The hematopoietic, endothelial cell and cardiogenic potential of inducible ER71- GATA2-Scl pluripotent stem cells and embryos will be fully determined. In aim 2, we will test the hypothesis that hemangioblast formation requires ER71, GATA2 and Scl functional interaction, which can be elucidated by characterizing their downstream gene regulatory networks. In aim 3, we will test the hypothesis that pluripotent stem derived hemangioblasts can generate functional hematopoietic and endothelial cells in vivo. We will determine the full in vivo hematopoietic and endothelial cell potential of induced hemangioblasts. Successful completion of the proposed studies will have impact on both basic and applied science. Ultimately, we will have a deeper understanding of how the hematopoietic system is established during embryogenesis. This topic is most fundamental to the developmental biology of hematopoietic, vascular and cardiovascular fields. We envision that PURE hemangioblasts can be obtained from any pluripotent stem cells by temporally modulating ER71, GATA2 and Scl expression. Thus, positive outcome from the current proposed studies would be directly applicable to regenerative medicine utilizing pluripotent stem cells in the future.